No Type of Financing Purchase Price Market Value Financing Amount (RM) Tenure Financing Rate (%) 1. Land - 2,000,000.00 1,500,000.00 15 years 3.0% 2. Factory building - 1,000,000.00 800,000.00 15 years 3.5% 3. Machineries 550,000.00 - 500,000.00 7 years 3.5% 4. Vehicle 400,000.00 - 300,000.00 9 years 4.0 % Total 950,000.00 3,000,000.00 3,100,000.00 The company started its operations at the factory with new machineries at the end of January 2015 and recorded a 70% increase in sales for financial year ended 31 December 2015. The performance remains consistent in year 2016 and the company has been prompted in servicing monthly instalment. (f) Suggest ONE (1) type of collateral can be taken by the bank to secure each of the above financing. Calculate collateral value for each of the financing. No Type of Financing Purchase Price Market Value Financing Amount (RM) Proposed Collateral Collateral Value 1. Land - 2,000,000.00 (CV = 2 000 000 x 90% = RM 1 800 000) 1,500,000.00 GIA House Shares ASB RM 350 000 x 100% = RM 350 000 RM 750 000 x 90% = RM 675 000 RM 270 000 x 60% = RM 162 000 RM 200 000 x 100% = RM 200 000 TOTAL: 1 387 000 2. Factory building - 1,000,000.00 800,000.00 Building Rm 1 mill x 90% = RM 900 000 3. Machineries 550,000.00 - 500,000.00 Machineries RM 550 000 x 75% = RM 412 500 4. Vehicle 400,000.00 - 300,000.00 Vehicle RM 400 000 x 60% = RM 240 000 Total 950,000.00 3,000,000.00 3,100,000.00 (16 marks) However, the financial performance starts deteriorating in the second quarter of year 2017. Even though the company recorded consistent sales during the financial year ended 31 December 2017, the company suffered a significant reduction of 60% in their net profit